The Lazaridis Review - Issue Two

ISSUE

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Lazaridis Business Review

2018 in Photos See what our clubs accomplished last semester

Startup Success

How Lazaridis has helped the next generation create their own app

House Hunting An outlook on the 2019 Canadian Housing Market

Table of Contents Hayley McGoldrick Editor-in-Chief

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Calendar of Events

Mahad Aamir VP Marketing

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Club News

Maddy Rotman Design Director

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Faculty Feature

Ujjwal Nambiar Content Creator

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STRIIVE Interview

Max Strychaluk Content Creator

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Business News

Contributors:

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Alumni Corner

Liam Niznick Deepinder Sidhu Braeden Smith

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Real Estate Laurier Feature

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Calendar of Events Friday, Febuary 1st • Laurier Insurance & Risk Association: Bus to Bay • Startup Laurier: Entrepreneurs Exchange Tuesday, February 5th • Human Resources Laurier: HRPA Designation Talk • 5 Days for the Homeless: Bingo with Twan Wednesday, February 6th • Laurier Accounting Association: CPA In Industry Wine & Cheese • Laurier Economics Club: Basic Income Event Thursday, February 7th • Laurier Economics Club: Academic Drop-in Session • JDCC: JDCC 2020 Information Session Friday, February 8th • Laurier Marketing Association: Inter-University Case Competition Thursday, February 14th • Valentine’s Day Tuesday-Friday, February 19th-22nd • Reading Week Tuesday, February 26th • Women in Leadership Laurier: WILL x CLV

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Club News JDCC x The Link

JDCC and The Link teamed up for the first ever Careers in Case Analysis Conference that featured many Laurier alumni in consulting careers to help students with consulting, case analysis, and career opportunities.

SML

Sports Management Laurier’s inaugural Charity Golf Tournament raised over $1000 for Kidsport KW, a local organization that helps kids who cannot afford organized sports.

Enactus Leaders of Laz

One of Enactus’ social innovation projects, PolliNation, took the school by storm as their Hawk Honey, made on Laurier’s Northdale campus, sold out on campus the first day it was sold due to the demand.

Leaders of Lazaridis’ first annual Lift-off Leadership Summit included a networking session with employers, 2 workshops and a leadership panel to give the next generation key leadership qualities to take them further in the workplace.

LIFA x PRISM

Laurier Investment and Finance Association hosted their stock pitch competition is partnership with PRISM Resources where the first place teams in each division received $250.

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LMA

Laurier Marketing Association’s annual Laurier Marketing Case Competition this year was sponsored by Procter & Gamble, a company that has been on the Forbes 500 list for over 20 years.

HRL

Human Resources Laurier hosted their first ever Tabletop Networking event where students could interact and network with HR professionals about future careers and post-graduate programs in human resources.

LSA

Laurier Sales association’s IBM Sales Summit hosted current Summit sellers as panellists to educate students on one of the world’s biggest companies and help them learn more about the IBM Summit program.

Lazsoc

The annual Lazaridis Networking Gala hosted multiple corporate sponsors for students to network with as well as successful alumni to help current students secure a future outside of Lazaridis.

Xlerate

Xlerate’s Select program helps first years by matching them with mentors to help them navigate their first year at Lazaridis.

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Faculty Feature As an assistant professor in the Organizational Behaviour (OB) and Human Resources (HR) department, Dan taught Organizational Behaviour 1 (BU288) in the fall semester and is currently teaching a Ph.D class in research measurements. Here, we discuss Dan’s journey to Laurier, his interest in OB, his work in the game industry, career advice, and his favourite video games. – By Ujjwal Nambiar What do you enjoy about teaching at Laurier?

Any qualities unique to Laz you admire about the school?

The students are really cool here. The quality of students is very high, being a business school.

The business students I had last fall were very very very bright. Totally impressed; it makes it a much easier job, more fun. Laurier is set up in a way where it tends to balance the desire for high-quality teaching with high-quality research, which I find quite exciting. Lots of universities sadly deprioritize the quality of education over research. Laurier –certainly the group I’m in – prioritize both, which works for my objectives; one of the reasons I came back to uni after being in the university was that I looked back in my career and asked “What did I really enjoy about my career?”. I had a long history of mentoring people in the software industry (over 100 people).

Being a professor isn’t quite the same thing as mentoring, but it is close enough that I get to employ the same strategies and techniques, and I get the same enjoyment out of it. For me, being at Laurier and it prioritizing education and the quality of education is good for me because I’m very motivated by the idea of mentoring and growing other people.

What led to your interest in organizational behaviour?

After graduating from Calgary and getting my first job, I went to work at EA Canada, where I started as a mid-level software engineer and began moving up the ranks, eventually becoming a Senior Engineer and Technical Director, where I

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was running groups of engineers – managing 20 to 30 at a time. I was the chief architect of a video game, but at the same time, I was mentoring other engineers and recruiting engineers.

As you become more and more senior as a software engineer, you keep coding, but then all of a sudden the responsibilities shift a little bit – you have to keep track of people. That becomes a little bit different. When you’re a coder, everything is black and white; you write the code. Is the syntax correct? Does it run? Are there bugs? When you’re dealing with people, it’s all shades of grey. As I was moving up and taking on these roles, the shades of grey became more interesting. The black and white became kind of boring – I had coded all this stuff before; I knew which algorithm I should be employing. But people – dealing with people and maximizing the effectiveness of the people and making sure they have a good working environment and making sure they are making truly great products – that is a challenging thing to do.

And all of a sudden, you’re faced with the idea that this is a completely different set of skills than coding. And that became fascinating to me – just dealing with the issues, and I dealt with every possible conceivable single issue, both at EA and at my own company. My interest over the course of time became less and less to code and more and more to code and manage people and ensure that they are excelling and being the most and the best they possibly can be.

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Let’s pivot now to your ‘stint’ in the industry.

Let’s talked about how you started working in EA Canada.

Well, I had industry experience before. After I got my degree, I was purposeful with my resume and applied to three or four places, and I ended up at EA. It was a lot smaller than it is now. When I joined, there were only 300 people. Over the 7 years I worked there, it grew to 2000 people and it became – in the time I was there - the largest video game studio in the world, in terms of both sales and staff.

I was hired as a mid-level engineer on Triple Play Baseball back in the late 90s. I worked at a lot of different projects in EA. After the first project I was on, I assumed a bit of a ‘firefighter’ role, where they would basically have problems within the studio or around the world, and they would send me to fix things. I would go and camp out at someone else’s studio and get things fixed. Often, it was external developers having issues.

“

My interest over the course of time became less and less to code and more and more to code and manage people and ensure that they are excelling and being the most and the best they possibly can be.

I did that for a while, and then I started a group to make MVP Baseball. The quality of Triple Play Baseball had languished for a number of years, and truthfully, I didn’t feel good about that – this was the project that hired me. I started staffing up a team with a couple of coop students and made a demo, which convinced the company that we could do a better job than an external developer. The game was quite successful. I became known internally as a person who could solve problems, staff teams, and write games from scratch , which is a very rare thing in EA Sports because they turn out sequel after sequel. In my time there, I worked on a lot of games at EA, I don’t know the exact number.

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Far From a Fairytale Interview with STRIIVE - By Max Strychaluk

While on your way to work one morning, sipping a coffee and thinking familiar thoughts, the solution to a timeless problem suddenly occurs to you. The solution seems so obvious now that you kick yourself for not having thought of it sooner. You call your best friend and giddily tell them to meet you at your place later. She comes over, and you astonish her with your ingenious idea. During the next month, you and your friend meet with various venture capitalists, all of which are begging for you to take their money. After accepting an offer, you and your friend begin bringing your brilliant idea to life, and couple of years later, before you even turn 26, you’re a millionaire.

Tales of entrepreneurial success are often contrived and remarkably idealistic. In reality,

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entrepreneurship tests your perseverance rather than your brilliance. Stories of struggle and adaptation are far more common than those of ease and ingenuity.

Etai Mizrahi and his co-founder, Andrew McEwen, first began discussing Striive in December of 2017. A unique fitness application, Striive would improve gym attrition rates by using tangible rewards to motivate members. Exclusive discounts on sportswear and health foods would be awarded to users that exercised often and used the application to record their activities and check in at their gyms. After deciding on a B2B2C model in which gyms would be charged for the service, the co-founders developed a preliminary version of the user application.

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Ten months after its launch, the company had failed to turn a profit and was struggling to reconcile its understanding of the gym industry with reality. Prominent gyms were concerned not with attrition rates, as their initial research suggested, but with their bottom lines. Regardless of whether Striive could increase member attendance, gyms were uninterested. The cofounders, having solicited input from small gyms and fitness centers only, were unaware that the concept wouldn’t scale to larger customers.

When they first launched Striive, Andrew and Etai were well aware that the industry was replete with competition. Striive could, they thought, differentiate itself in the long run through a unique rewards program and by providing both users and gyms with unique benefit.

Market research into user behavior also proved inadequate, with the company falling victim to the same issues that plagued their competitors: fit users got the most value out of the app, while those who were out of shape remained so.

By October of 2018, it was evident that the problem-solution fit on which Striive was built did not map onto reality. If the company was to survive, the current business model had to be overhauled. Despite the inherent risks in pivoting the business, the founders felt that complacency was far more dangerous.

Increasing concern for employee well-being had led to a proliferation of corporate health and wellness programs across North America. Etai and Andrew suspected that Human Resource departments lacked an effective means of monitoring the impact had by these projects.

To ensure that their customers would truly be willing to pay to solve this problem, they spoke with HR Managers at companies of various sizes.

This time, the problem-solution fit did map onto reality: companies needed to evaluate the success of their health and wellness programs, and they were willing to pay for a platform that allowed them to do just that. Since, Striive has secured new funding and is working with their customers to develop a platform that addresses their unmet needs.

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The story of Striive is far from a fairytale, but so are most tales of entrepreneurial success. Failure and adaptation are, forgive the platitude, par for the course.

When asked about any recommendations he has for new entrepreneurs, Etai says that selling must come before building your product. Finding that you are unable to create a product, he says, is much better than finding that you are unable to sell it. He also encourages anyone interested in entrepreneurship to apply for JDCC here at Laurier, which taught him how to present effectively and communicate concisely.

Striive is located at the Communitech data hub in Uptown Waterloo, and if you have any questions about the company, head to www.gostriive.com or send Etai an email at etai@gostriive.com.

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Business News Cooler Screens Get Even Cooler Don’t know what drink to pick from the freezer? How about having the door make a recommendation? That’s what the Walgreens Boots Alliance and the start-up Cooler Screens are working on – a network of “smart” displays that target ads for specific types of shoppers by using cameras, sensors, and digital screens.

These screens serve a dual purpose – displaying the food and drinks inside the refrigerators, and acting as an in-store billboard that displays ads to approaching consumers, based on factors like the weather, consumer age, and their gender. The cameras and sensors can be used to determine whether shoppers interacted or bought products – useful information for advertisers – and can be used by retailers to gauge product inventory. Cooler Screens has raised around $10 million in funding and has support from advertisers like Nestle and MillerCoors LLC. Only further testing will tell if consumers will be fine having cooling appliances passive-aggressively dictating their choice of soft drink.

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Searing Hot Bankruptcy After having filed for bankruptcy with over $7 billion in assets, Sears will manage to stay alive – for now – due to billionaire and chairman Edward Lampert paying $5.3 billion to maintain control of the retail brand and to push off plans of liquidation, saving over 400 stores from shutting down and preserving over 50,000 jobs. The question now is whether Lampert can rescue Sears from its battered and bruised state? More stores are expected to close after the bankruptcy case and the company lacks the necessary scale to compete with brands like Walmart and online giant Amazon. A possible strategy is to shrink the business by keeping around 300 stores and focus more on appliances instead of apparel. Sears going bankrupt is not necessarily the nail in the coffin – retailers like Payless ShoeSource have rebounded from similar situations. Whether Sears will likewise rebound to the ranks of Payless or plummet down to join once mighty retailers like Toys “R” Us remains to be seen; all that is certain is that 2019 is the year that Sears fights tooth and nail to stay afloat.

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Netflix Hikes Prices to Fight off Mickey Mouse and Friends As Netflix works to attract more talent to its streaming services and away from new streaming competition like Disney’s upcoming Disney+ and WarnerMedia’s upcoming subscription streaming services (both set to arrive in late 2019), it faces decisions it knows will not please its audience, one of them being their recent price increase for all plans in the U.S. The most basic plan now costs $9 monthly instead of $8. $13 – no longer $11 – will get US audiences the plan to stream on two screens at the same times. Raising these prices are unfortunately necessary to help Netflix manage higher content costs as it fights off Amazon and Hulu and prepares for Disney and WarnerMedia’s arrival. Case in point: Netflix is expected to spend $12 billion licensing and creating content this year.

Seeing as we Canadians already faced a price hike in late November of 2018, perhaps now we can feel a sense of apologetic comradery – or superiority - we’ve come to adopt over our southern neighbours as they struggle to afford the privilege to binge-watch Friends before the show is ruthlessly taken over to WarnerMedia’s service.

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Going Galactic Space tourism is becoming more and more of an possibility as a test flight for Virgin Galactic’s space plane, SpaceShipTwo, reached the edge of space, where the two pilots on board reached maximum speeds of 2.9 times the speed of sound. The success of this flight puts Galactic in a better position to compete with Blue Origin - its main space-tourism rival run by Jeff Bezos of Amazon – to be the first company to carry paying passengers outside the atmosphere. Both companies anticipate commercial flights will commence around late 2019, although their timelines may change depending on the outcomes of future test flights. This test mission also carried several NASA experiments, meaning that the flight made history by being the first commercial revenue gained in the field of space tourism.

The sky doesn’t seem to be the limit as Galactic and Blue Origin continue their race to space.

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Alumni Corner Ryan Smolkin, BBA ’95, Founder of Smoke’s Poutine - By Hayley McGoldrick

What would make someone, Laurier student or not, the best fit to become a franchisee who may have all their fees covered?

What is the process?

They’re the people who are putting together a business plan, they know what our brand is all about, what the culture is, our values, and from that pick and take it to the next level. After that they’ll come and present, we’ll sit around and have a coffee, we’ll talk business; it’s sort of like the typical interview process, but we have to see if it’s really a true fit. It’s got to work both ways, not just that you win but it’s not a good fit on our side, but also a fit for a franchisee they’ve got to know what they’re getting into.

Eyes wide open, it’s a tough industry, and the worst case is that they get to sit around with me for a while.

What advice would you have for a young entrepreneur going into any field, not just the food industry?

I’d honestly just say, and when I say go for it, I mean go for the gut when you want to go after it, but just build it. Get out there and go crazy and build it, it’s your own idea you’re getting out there and going with, or with a franchise model in general, because that’s what they’ve always said about franchises; you’re working for yourself but not by yourself, so you do have that support. You’re running your own show, you’re running your own business, right?

I don’t think people realise that the funding is there, it doesn’t always have to be the brilliant idea that will make you an instant millionaire. That doesn’t happen, it never happens.

A lot of people would want to be a founder and CEO just like you.

What is the reality of it?

If you’re going in thinking, “Oh I want to start my own thing, I want to make my own hours, I want to make a million, I want to do my own business.” Well, you’ve already failed. You don’t make your own hours; the business dictates your entire hours and your entire life if you want to be successful. Then also you won’t be a millionaire, you have to work your tail off and it’s going to be a long time before you see the money, but it’s the excitement of building something from nothing, so as long as people are going in with the right mindset, being an entrepreneur is the best experience of all time.

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Ryan Smolkin/Contributed Image

In November of 2018, Ryan Smolkin made an appearance at Lazaridis for a speaker series on entrepreneurship put on by the Schlegel Centre for Entrepreneurship and Social Innovation.

Smolkin talked about his past at Laurier and his current journey to world domination with poutine.

He also announced an opportunity for one Laurier student to have 100% of their franchise fees covered if they applied to be part of the Smoke’s family.

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2019 Outlook on the Canadian Housing Market - By Real Estate Laurier

Predicting the short term trend of the housing market has never been a simple task. It is constantly impacted by every macroeconomic force that rocks the economy. Consensus estimates for the year are relatively bearish with most analysts predicting that housing prices will rise by just below inflation, yet the underlying condition needs to be considered.

Last year, the price of the average Canadian house declined by 4.9%, with sales falling to their lowest level since 2012. This comes after several years of above-average growth. Home prices in Canada have grown almost 24% since 1999, when adjusted for inflation. A substantial growth when compared to Australia’s 18%, the United States’ 13%, and the United Kingdom’s 12%. Meanwhile, Canadian household debt is equal to our GDP, and nearly 170% of our disposable income. Thus, households will be incredibly sensitive to interest rate increases. The Bank of Canada raised interest rates by a total of 0.50% over the course of 2018, which caused a decrease in demand for credit, and a corresponding decrease in housing prices. Prices have also been affected by regional government attempts to corral the influence of foreign investors, who have been blamed for the out of control housing market.

In Vancouver and some other regions of British Columbia, there is a 20% tax to any non-permanent residents who purchase property. A similar 15% tax is in place in the Greater Golden Horseshoe region of Ontario.

The housing market follows a more or less the 18-year cycle established by economist Fred Harrison, yet in the long run housing prices will rise. Before looking at the macroeconomic and demand/supply constraints that are currently impacting the housing market, it is important to understand why house prices increase. The house itself is a depreciable asset class. As you would have learned in BU127, PP&E depreciates on the balance sheet, but yet house prices increase! This is because the supply of land is fixed, and assuming ordinary population trends, the demand

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for land will increase perpetually. In a rising market, house prices increase faster than wages and they will eventually become too expensive, demand will retract, which is often occurs at a time where prices were so attractive that housing starts and building had increased, thus leading to a large drop (bust) to the housing cycle.

Having established that in the long run, house prices will increase because of the scarcity of land and the perpetual increasing nature of demand, we now look at the reasons for potential future short term price fluctuations. While house prices did not perform admirably in 2018, you should not expect them to rebound in 2019. The Canadian Real Estate Association forecasts house prices to increase by roughly 2.1% (near inflation) in 2019. Estimates are bearish across the board with every consensus being near inflation. This is caused by the world of uncertainty the market is currently facing.

There are two major buy-side factors that influence the short term fluctuation of house prices: consumer confidence and interest rates. Each of which influence each other. The Bank of Canada is expected to perform three rate hikes in 2019, which will decrease the demand for mortgages. In addition, consumer confidence has dramatically decreased in January (98.3 to 90.7 Michigan consumer sentiment index). Many economists estimate that we are in the 9th inning of the economic expansion and major macro data supports that a recession is in the picture come 2020/21. Recessions are self-fulfilling prophecies and it will accompany a decrease in consumer wealth, thus a decrease in the demand for housing and prices. So while an increase of 2.1% might seem regular, this is a nervous 2.1%.

Not all indications are bad, despite the continuous increase in the stock of rental housing property in Ontario, the vacancy rate has decreased to 1.3% due to elevated demand. The Ontario government has removed inflation linked-rent increases for new property developments. So where there is less opportunity in housing, there is optimism among renters.

Everything considered, don’t count on price increases to make up for negative cash flow. I would place an attentive hold rating on the housing market, but if prices continue to drop, there is opportunity in certain markets.

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The Lazaridis Review is a collaborative effort of many of the bright, talented students the school has to offer. Each of them put countless hours into this publication, and are forever grateful for those of you who choose to put your interest into what we create. Each month, we will continue to showcase the diverse talents that exist within this community, and we hope you’ll continue to join us for the journey.

Love, The Lazaridis Students’ Society & The Lazaridis Review Team

Want to contribute to The Lazaridis Review? Email hayley.mcgoldrick@lazsoc.ca or mahad.aamir@lazsoc.ca to inquire about getting involved.

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